What's Working? Seven Ways Firms Can Measure Their Marketing Investments
While technology tools and the Internet have helped to make marketing investments much more measurable, most firms are still not taking full advantage of these tools and continue to struggle to accurately measure their marketing programs.
With the growth of the Internet and social media, there has been an explosion in the number of channels and options firms can utilize in delivering and measuring their marketing campaigns. While technology tools and the Internet have helped to make marketing investments much more measurable, even in traditional marketing channels like print and radio, most firms are still not taking full advantage of these tools and continue to struggle to accurately measure their marketing programs.
In addition, traditional practice management and billing systems have mostly been disconnected from the marketing systems, related service providers and overall marketing initiatives. As a result, the two components of the return on investment equation (activity and costs/billings/cash flow) are not linked to provide an easy answer to the questions, “Who are the firm’s best and most profitable clients and where are they coming from?”
Here are seven strategies that firms of any size can use to better evaluate and measure their marketing investments:
Track every channel and campaign using call tracking numbers and web analytics
While the Internet continues to be the primary research tool and marketing channel, most new clients will still call the firm. Unfortunately, most firms use the same phone number everywhere, making it almost impossible to accurately determine the sources of incoming clients. Any good marketing services provider should offer call tracking phone numbers (toll-free and local area code) for each and every distinct campaign, as well as easy-to-view reports by campaign. Some channels (like the Internet) should have a different number for every sub-channel, e.g., specific firm websites and landing pages, pay-per-click campaigns, online directory listings, etc. While it’s fine to ask the potential client where they heard about the firm, this is often unreliable and “Google” is often a catch-all response.
Every firm, regardless of the size, should also have detailed web traffic reports, using Google Analytics or a similar program to track which marketing sites and sources drive phone calls and contact form submissions. While this can get a little complex, firms should ask their marketing vendors for help with interpreting the data, and developing simple reports or should consider hiring someone in-house to manage this information.
Establish a solid process to capture, track and convert leads
Even if marketing efforts send the firm a high number of qualified client leads, it is critical to have a solid process to “catch” and track the incoming calls and emails. Before making large advertising investments, firms should first think through the process of receiving and capturing the incoming leads and plan for any spikes in volume by using additional staff or virtual assistants. They should also have a good “close” process and customize this process based on the various marketing sources. Prospects coming from the Internet, for example, expect to talk to an attorney almost immediately, whereas a connection made at a networking event may require a slower process with multiple interactions to develop the relationship.
Input marketing source information into contact/practice management applications
Firms can use call tracking reports, web analytics and other reporting to link source information to client records in the firm’s contacts database or practice management application. Some of the newer systems will soon be able to link this information automatically. Main categories--such as “search engine ads,” “direct mail,” and “networking events”--can be created by the firm to track marketing investments and value at a high level, but this tracking should also get as specific as possible (e.g. “litigation attorney” keywords on search engine ads).
Fully capture the costs and value of every client
By linking the marketing sources to matter management, time tracking and billing software, firms can more fully capture costs (time, research, fees, etc). When marketing sources are linked to billing, firms can also evaluate how quickly and fully payments are received and capture any costs associated with late payments or collections. This provides a full “closed loop” view of the return on the marketing investment over the course of working with each client. The firm can then calculate both the cost of adding a new client and the value of each client to the practice.
Measure the “intangible” benefits
There is a saying in the marketing world that every campaign that can’t be measured or that doesn’t deliver results is called “branding.” While larger, more established firms may choose to spend a good portion of their marketing budget on branding, small law practices, especially new ones with limited budgets, should focus on the most measurable marketing channels first. At the same time, using marketing to get social media followers, press mentions, testimonials and client referrals also has high value and should be included in the overall assessment of marketing effectiveness. Web analytics can show sources of social media and news site traffic and referral sources can be tracked in contact/practice management systems.
Shift marketing investments based on return on investment (ROI)
At least monthly and also during annual budget planning, firms should use all of this information collected to evaluate each marketing channel, campaign and respective vendor based on the return on the marketing investment. They should then adjust budgets to the channels, campaigns and vendors that are working and reduce or stop spending on the ones that are not. New campaigns or channels can often take multiple tries or several months before firms can make an accurate assessment. Until a service provider or channel can show results, firms should avoid long-term contracts. Additionally, if a marketing proposal or vendor is unwilling to discuss marketing ROI, then the firm is better served to look elsewhere.
Test new marketing campaigns regularly
All firms, regardless of how large or well-established they are, should test new marketing methods, campaigns, channels and partners. More established firms should reserve about 10% of their monthly marketing budget for these tests, and newer firms may allocate much more until they collect sufficient experience and data. This testing helps to ensure that firms don’t rely too heavily on existing sources of new clients, only to see those sources’ effectiveness go down over time. Testing can also be used to try things that didn’t work in the past, perhaps in a different way. For example, it is common for firms to attempt to run their own search engine ads without success, but then hire an outside firm and see better results. When testing, also make sure to understand the required timeline to appropriately measure a test, which could vary from a couple of weeks to a few months.
Firms should evaluate these strategies on a campaign-by-campaign basis to determine whether they should outsource specific marketing expertise or develop their own.
Finally, in order to make informed marketing decisions based on real-time data, it is critical to have robust marketing, practice management and analytics tools, which work in unison to provide the complete view of investments and returns. It’s also important to have trustworthy marketing consultants and/or in-house staff to help with the more complex aspects of measuring and managing sophisticated and effective marketing campaigns.
About the Authors
Carey Ransom is the CEO of RealPractice, Inc., a provider of legal technology solutions and services to some of the largest law firms in the country, including Skadden and DLA Piper, as well as to thousands of solos and small firms. Carey, an experienced Internet and software entrepreneur, has spent many years in key executive roles at companies including Brand Affinity Technologies, WebVisible and Message Rite (now Microsoft).
Brad Cooper, Senior Vice President of Marketing and Sales at RealPractice, is a technology and marketing veteran with nearly 20 years of experience including marketing roles at Apple, Xerox, Macromedia (now Adobe) and WebVisible, where he and his team managed thousands of law firm marketing campaigns.